Apple Vrio

Apple has historically maintained several key competitive advantages in the computer industry. Among them is Apple’s ability to create one of the strongest brands in the world, integrate intuitive user friendly software, maintain exclusive technology, differentiate with product design, and create a network within its products. Using Barney’s VRIO framework, we can deconstruct these attributes to examine how Apple uses its resources to maintain a competitive advantage.

By looking at Apple’s resources in terms of value, it becomes clear how Apple became a dominant force in the computer industry and how it continues to dominate. Apple possesses several valuable resources, primarily in the form of its exclusive technologies and strong brand, which add immense value to the company. Apple has effectively created a protected environment across their product lines by making their software closed to only Apple products. This creates a sense of exclusivity in the consumer’s mind and makes them feel more connected to the brand as it increases their perception of Apple’s products as premium and luxury goods. Apple also holds several key patents which make up its impressive hold on PC intellectual property, adding more value to the company and helping Apple to differentiate itself from a crowded market. A strong relationship with suppliers built upon a low cost production model also allows for a strong value-chain. These factors, on top of Apple’s ability to attract and maintain top talent in the PC industry to drive innovation, truly give Apple a competitive advantage in terms of valuable resources. On the other hand, Apple’s exclusive technologies and patents have also been met with some criticism. Apple software hasn’t always been compatible with other applications and PC technologies which can leave an Apple customer feeling isolated, decreasing the value of Apple’s products.

The second part of Barney’s VRIO framework examines how rare a firm’s resources are and how they are used to gain a competitive advantage. Few firms can attract and maintain the talent that Apple does, as evident by its impressive product launch schedule and products that continue to redefine the market nearly every year. Apple’s culture is also rare in the industry. While competitors such as Microsoft are slow to innovate due to their bureaucratic structures, Apple has successfully maintained a “start-up” like atmosphere despite being a billion dollar corporation. This nimble organizational structure is rare amongst the industry and allows Apple to continue to innovate and launch products more effectively and quicker than competition. However, this yearly pressure for Apple to deliver and innovate has sometimes been a liability when products fail to live up to expectations (Apple TV, possibly Apple Watch).